A Christmas Surprise

During final preparations for the holiday season late in the afternoon of Friday December 23, my daughter (who had an internship at PJM Interconnection a few years ago while in college) showed me a screenshot of actual load for all of PJM diverging upward from the forecast load (internships do make lasting impressions on young people as they begin their careers – a topic for another day).

A visit to the PJM Markets & Operations dashboard at 5:03 PM showed some interesting visuals:

  • The entire PJM map was a dark raspberry color indicating Locational Marginal Price (LMP) > $500/MWh – everywhere. Not a little more than $500/MWh, but just over $3,700 across PJM.
  • Primary reserves were short by 1,000 MW (which brought back memories of January and February 2014, during the “polar vortex” when available generation exceeded actual load by only 500 MW).
  • Revisits of the map showed PJM implementing Shortage Pricing and various Emergency Procedures.

Within the hour, a Performance Assessment Interval was initiated by PJM, commencing a period where generators and demand-responsive load are scrutinized for “Capacity Performance,” a regulatory mechanism where penalties are assessed for non-performance by resources that have sold their capacity into PJM’s capacity market:

A few observations:

Forecasting is a thankless but crucial task, because at peak times, small deviations in the wrong direction create the potential for system stability issues in the event a large unit or transmission element should trip offline.

As discussed in Tangibl’s November 30, 2022, blog post, several PJM zones have requested their load forecast be adjusted upward as new industrial-scale loads materialize.

One thing I’ve learned with over 40 years in this industry: when load growth arrives, it does so rather unexpectedly – and sometimes in a big way.

Late on Christmas Eve afternoon, PJM filed a request with the U.S. Secretary of Energy for an emergency order under section 202 c of the Federal Power Act, including a temporary lifting of environmental limits on certain generating units (3,300 MW total, with possibly more to follow). Mentioned rather matter-of-factly on page 2 of the request was “approximately 45,000 MW (45 GW) of generating units (the majority of which is thermal) are currently outaged or derated” because of “operating difficulties due to cold weather or fuel limitations, primarily gas.” The rest of the filing focuses on the need for relief of environmental limitations.

45 GW equals 25% of PJM’s installed capacity (ICAP) of 181 GW – but also represents five times the five-year average forced outage rate (EFORd) for all of PJM. Time will tell what proportion of the total was due to un-preparedness, component failures, or curtailment of pipeline natural gas. Were this capacity truly available on December 23, however, it could have avoided the emergency condition and given PJM Operations a more peaceful Christmas holiday.

A final thought: the fuel mix for this weather event was ~25% coal (about half its contribution a decade ago), ~1/3 natural gas, and 25% nuclear. Some of the 45 GW that never showed up may disappear for good after Capacity Performance penalties kick in. If less than 32 of the 45 GW survive as unforced capacity or UCAP (~32 GW of coal associated with the December 23 dispatch), and that capacity is to be eliminated with the “energy transition,” then an extraordinary number of new resources will be needed in the near-term planning horizon. Specifically, long-duration storage resources (technology to be determined), and/or new (proven) fast-start fast-ramp generation – that can accept load in as little as ten minutes – will be required to complement renewables.